The basics of making a budget is similar whether or not you are married. It is also the same no matter in which stage of life you are in right now. You still need to plan for your financial goals, towards meeting bills and for saving for the future. Your income is limited, which you get at the end of the month. Since that is thus limited, you can spend only a certain part of it and save the rest.
When one gets married, one’s personal finance goes over a change as well. You now need to think about family finance to increase income and family security. At the same time, you need to decrease expenses. There certainly are complications, but with good planning, communication and flexibility between newlyweds, everything is possible.
Before your wedding, it is a good idea to talk about both your financial situations. If you have not done this already, don’t wait for it till the wedding is over. After all, you do not want to have the unpleasant surprise of knowing that your spouse has a bug debt and expects you to repay it! In all seriousness though, know the money history, recent spends, personal financial hopes and dreams of your spouse. For all this, you need to make a budget before settling in together.
Here are a few things you can discuss about:
What are their views and attitudes about money?
How have they managed their personal finance till now?
How does money make them feel?
What are their financial goals?
It is a good idea to have such discussions regularly. After all, your financial goals and money attitudes can change over time.
It is totally a personal decision whether to combine your finances or not. If you do want to combine it, and there are obvious benefits for it, there are several ways to do this. While both of you may have separate accounts, it makes a lot of sense after marriage to have a joint account for meeting recurring household expenses.
That being said, don’t put all your money into a joint account or shared account. Make sure each one of you has a separate account and individual budget to meet your separate expenses and handle separate income. There can be some things for which you do not need permission from the other. However, if you do decide to combine your bank accounts, have some usage ground rules. Each of you should know how much you both can spend per month, for instance.
If you are experienced in planning for your personal finance, you know how important is saving for retirement and in having an emergency fund. But if this is your first time, you need to set some priorities straight. These are:
Save for retirement
Tackle your debts
Build your emergency fund
If you can, make the joint account prior to marrying. For one thing, that is one less thing to do post marriage.
Find out your combined take-home income
Pick the 50/30/20 budgeting approach
Track your progress
Be flexible and adjust when needed
There are some things which need to be done after the knot has been tied. They include:
Choose your health insurance carefully
Update financial institutions about your name change after marriage
Update your tax documentation